Asset/Liability Management

Based on National Credit Union Administration (NCUA) 5300 Call Report data, the Key Ratio Analysis Report is a comprehensive report analyzing key ratios relating to capital adequacy, earnings stability, asset quality, liquidity, and interest-rate risk. This report also includes an expense analysis for the credit union. 

Cornerstone assists credit unions in revising or developing investment and/or asset/liability management policies for non-complex credit unions. Policies meet the operational needs of the credit union and comply with NCUA/state department credit union guidelines.

This Excel-based spreadsheet enables a credit union to perform a historical liquidity analysis to identify seasonality or particular months of liquidity strain or surplus. Our staff assists with interpretation.

Cornerstone conducts onsite, customized credit union training for volunteers and staff. Training is individually tailored and highlights the asset liability management process, with particular emphasis on the strengths and weaknesses of the credit union. All will gain a better understanding of the general concepts of asset liability management as well as how ALM relates specifically to their credit union operation.

The value of a credit union specific training session is that it:

• Is less expensive than traditional training methods
• Avoids travel for CU staff and volunteers
• Is personalized to meet the credit union's particular needs
• Allows the credit union to determine the length of training
• Can be divided into different sessions tailored to meet individual needs of staff and volunteers

Virtual education provides an economical opportunity for ALM training without leaving your credit union. This delivery method offers an educational tool for the board, management, and staff to enhance their understanding and ability to evaluate the financial performance of the credit union.

Topics of instruction include:

• Understanding Financial Statements
• The 13 Key Ratios Every Credit Union Professional Should Know
• Basics of GAP (Measuring Interest Rate Risk)
• Market-Based Pricing
• Issues to be addressed in an ALM Policy
• Issues to be addressed in an Investment Policy
• Asset/Liability Management Committee (ALCO)

Credit union professionals that desire a greater knowledge of ALM fundamentals might benefit from one-to-one ALM Mentoring. The specialized sessions include an overview of ALM principles and techniques with particular emphasis on the credit union's financial condition.

ALM mentoring is designed for individuals moving into senior management positions but who lack broad exposure to the ALM process. Training is tailored to meet the needs of the individual and conducted at their own pace. The information covered is roughly that of essentials and advanced workshops, yet expanded to include an assessment of ALM procedures in the individual's credit union.

These mentoring sessions are valuable for new board and staff members or individuals assuming greater levels of responsibility within a credit union.